Japan's manufacturing activity grows at slowest pace in 3 months in May

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Japan's manufacturing activity grows at slowest pace in 3 months in May

TOKYO Reuters -- Japan's manufacturing activity increased at the slowest pace in three months in May due to supply bottlenecks due to parts shortages and China's COVID 19 lock-downs, which caused output and new orders growth to slow.

Services sector activity improved for the second consecutive month, due to the fading impact of the epidemic, though service sector firms faced a drag from the sharpest rise in input prices on record.

The PMI from the Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index fell to 53.2 in May from a final 53.5 in April. The 50 mark separates contraction from expansion.

The uncertainty surrounding price and supply developments lingered on as output and new orders expanded at their slowest rate in three months.

Input prices rose at an increasingly fast pace for the 24th month in a row, while delivery times increased to the greatest extent since April 2011.

According to Usamah Bhatti, economist at S&P Global Market Intelligence, said private sector firms reported that the reduced impact of COVID 19 had lifted services activity, most notably in the tourism sector.

There were reports of material shortages and severe delivery delays as a result of the introduction of lock-down measures across China and economic sanctions placed on Russia after the Ukraine war. The PMI Index was adjusted to a seasonally adjusted 51.7 in May, from the previous month's 50.7 final, pushing up the composite index despite the slower manufacturing activity expansion.

The Composite PMI of the Jibun Bank of Japan rose to 51.4 from a final of 51.1 in April.